Meet the New “Virtual Grid” that Puts a Mini Power Plant at Your Fingertips

As global energy needs continue to expand, a unique wrinkle in the developing “energy balance” has emerged.

Now, regular readers of Oil & EnergyInvestor already know what I’m referring to when I mention the energy balance.

This is not the relationship between supply and demand.

That balance involves two related advances.

The first is an expansion in the number of reliable (and distinct) energy sources. The second addresses the extent to which these sources provide a genuine interchangeable network of availability from such sources.

Now, usually when we have this conversation, we typically focus on…

Renewable integration;

Increased power generation while reducing operating costs;

And estimating a more optimal way to meeting projected market-wide energy requirements.

The bigger picture items some might say.

However, today, we’re going to discuss something entirely different.

We’re going to talk about how it will satisfy more local market demand.

It involves something called VPP.

And if it can be deployed effectively, the concept could save grid operators money, make homeowners a boatload of cash, and open up a massive new market for investors to target.

Let’s take a look…

A New Energy Storage Solution

VPP stands for virtual power plants, and, from my perspective, they don’t get talked about nearly enough.

To put it simply, a virtual power plant is a network of decentralized, medium-scale power generating units.

And, if you think about it, the concept is fantastic – you take a host of small, individual, controllable, distributed energy resources (think battery systems, hot water systems, electric vehicle chargers, air conditioners and pool pumps) and assemble them into something that can be operated like a modestly sized power station.

The overall objective of these systems is to relieve the load on a power grid by (smartly) distributing the power generated by the individual units during peak energy demand.

This creates a more reliable overall power supply and will likely provide essential power to more isolated or confined areas.

Better yet, it may provide a new stimulus for expanding “smart” neighborhood systems…

Your Personal Power Plant

As I mentioned above, when integrated, a VPP systems can perform like a mini personal power plant.

Think about it…

If you need a little more power output, all you have to do is wind back your neighbors air conditioner, increase the output of another neighbor’s battery, turn down another’s pool pump and you’re good to go.

Put simply, it can adjust the usage of an individual source of power to better balance availability and demand across the entire neighborhood “grid.”

The obvious advantage here would be in its application to areas where the energy users are more spread out.

Now, one might think that a VPP, in these instances, would create a more efficient usage and distribution of power.

But that might not be the case…

VPP’s Traffic Cop

In more spread out neighborhoods, since each energy source (air conditioner, battery, or otherwise) is not equally distant, the reliance on one source to counterbalance another may not be the most desirable usage of the energy.

In fact, it may introduce a new factor of inefficiency.

Depending on the existing usage levels, the VPP may result in energy shortfalls for some participants and an unfair advantage to others.

Meaning the more land between you and your neighbors, the more difficult it is to optimize.

Current VPP technology doesn’t account for real-time network losses, won’t consider network technical constraints like current and voltage limits, cannot account for individual households’ specific energy needs, and doesn’t allow for specific responses to price signals based on time or location.

One of these is the CONSORT trial on Bruny Island, Tasmania, which connects some 33 residences.

All of these houses have battery storage, and the “virtual network” combines dozens of individual energy applications into a single network, coordaining their operation via “network aware coordination” algorithms. This system takes account of variations in price signals, both in location and time, and then manages the batteries’ outputs accordingly.

CONSORT project leader Professor Sylvie Thiebaux from The Australia National University says the Bruny Island Battery Trial is part of a larger project investigating new ways of allowing battery owners and network providers to work together to improve the reliability of the electricity grid and enable more customer use of renewable-energy sources.

“In essence, we’re trialling the electricity grid of the future,” she said.

Furthermore, folks in Australia, the U.K., and Germany are already designing more expansive approaches, called by some “VPP 2.0.”, if you will, that is working to remove VPP’s current limitations.

And it amounts to this.

One household’s battery’s stored energy may be used to address an issue in its connected network, while another household on that shared network may see a later, higher value use for its stored energy.

A third household may be on a different connection, and therefore will have little to no influence on solving that local issue and will not be used at all if the problem can be solved more effectively elsewhere.

In other words, the energy used to fix a network problem will be from the immediate vicinity, therefore conserving energy elsewhere.

Having such a “traffic cop” approach may just allow VPP approach a broader usage.

This new accessibility can become a small but significant element in a more nuanced global energy balance, which will ultimately provide better and cleaner power all around.

Sincerely,

Kent

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Dear Kent: What ever happened to the nuclear power units about the size of a large shed placed in the ground to supply power to an industrial court or a certain size community. Seemed like a great idea as they would last many years plus other advantages. ?

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